401(k) and Other Retirement Plans can automatically issue Loans and Hardship Distributions to Victims of Hurricane Harvey.
The Internal Revenue Service (IRS) announced on August 30, 2017 that participants of 401(k) Plans (and other types of company sponsored retirement plans), affected by Hurricane Harvey, are automatically approved to obtain a hardship withdrawal and/or participant loan from their 401(k) Plan. This means that business owners and their employees can access their retirement monies as financial assistance for recovery from this disaster and other basic needs.
Strict administrative and procedural rules often apply to hardship and loan programs in a retirement plan; the IRS’ announcement effectively suspends these restrictions for victims of Hurricane Harvey and allows retirement plan participants to more quickly and easily gain access to their 401(k) or other retirement monies.
401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims (and family members) of Hurricane Harvey. This broad-based relief means that a retirement plan can allow a victim of Hurricane Harvey to take a hardship distribution or borrow up to the specified statutory limits from the victim’s retirement plan/account. It also means that a person who lives outside the disaster area can take out a retirement plan loan or hardship distribution and use it to assist a son, daughter, parent, grandparent or other dependent who lived or worked in the disaster area. Leading Retirement Solutions is helping 401(k) participants and business owners, affected by Hurricane Harvey, get access to their retirement monies for disaster recovery and basic needs.